Key takeaways: Dr Tan See Leng's address on CECA, discriminatory hiring, WP nationalities, and more

In his speech on 6 July, the Minister tackled the key concerns on competition for job roles from foreign PMEs; diversity in nationalities of foreign PMEs, and addresses the topic of discriminatory hiring practices. 

In his first ministerial statement as Singapore's Minister for Manpower, in Parliament on Monday (6 July 2021), Dr Tan See Leng addressed a series of concerns surrounding Singapore's foreign workforce policies and their impact on local talent, including the Comprehensive Economic Cooperation Agreement (CECA).

Excerpts of his speech - where he responds to questions on competition for job roles from foreign PMEs; diversity in nationalities of foreign PMEs, and tackles the topic of discriminatory hiring practices - are shared below.

TL;DR:

• Singapore is taking a two-pronged approach to striking a balance between ensuring that businesses have access to skills and manpower to grow and succeed, and creating opportunities for local workers to grow and progress. 
  • First, is to ensure local workers can compete fairly, and this is done through work pass controls.
  • Second, is to ensure Singaporeans can compete strongly. Efforts in doing so include Singapore’s system of education and training, that goes beyond formal schooling (e.g. SkillsFuture), as well as further support mesures such as the SGUnited Jobs and Skills Package.
• To “address misconceptions and allow for a meaningful engagement on the issue at hand”, Dr Tan shared brief data on the nationality profile of work pass holders.
  • The top nationalities that comprise around two-thirds of Singapore’s EP holders has been consistent since 2005 – namely, China, India, Japan, Malaysia, Philippines, and the UK. While the proportion of EP holder from India has grown, it is not a result of "more favourable treatment of Indian EP holders" due to the CECA. Rather, it reflects trends in the global demand and supply of tech talent.
• When hiring foreign PMEs, employers must first advertise on MyCareersFuture.sg, and consider all local candidates fairly before submitting a work pass application. MOM has been progressively enhancing the Fair Consideration Framework to tackle discriminatory hiring practices, while TAFEP has handled an average of 170 nationality discrimination cases arising from complaints annually. Dr Tan noted that going forward, "we will do more to clamp down on egregious employers with discriminatory employment practices," taking any suggestions posed by MPs seriously, and studying various options to tackle this.

ICTs have to all meet MOM's prevailing work pass criteria

Associate Professor Jamus Lim of The Workers' Party (WP), and Leong Mun Wai of the Progress Singapore Party (PSP), had asked for the number of intra-corporate transferees, professionals and dependants that enter Singapore through CECA.

Reiterating a point made by Minister for Health Ong Ye Kung in an earlier speech (scroll below for excerpts of this speech), Dr Tan shared that none of the free trade agreements (FTAs), including CECA, "gives intra-corporate transferees, or ICTs, unfettered access to our labour market. They all have to meet MOM’s prevailing work pass criteria."

"Under the ICT route, the employer does not have to advertise on MyCareersFuture.sg, but the ICTs are subject to additional checks on their seniority, employment history, and work experience. They are also subject to more conditions in their eligibility to bring in dependants, and apply for permanent residency or future employment in Singapore.

"And if they have brought in dependants, the dependants do not have automatic rights to work here. They can only do so if they qualify for a work pass on their own merits."

Thus, he added, the total number of ICTs has "consistently been very small." In 2020, there were only about 4,200 ICTs, of which about 500 were from India - that is 500 out of 177,000 EP holders in Singapore.

"As for the number of 'professional visas' issued, there is no such category. As Minister Ong explained, all 127 categories of professionals under CECA currently come in under our regular work pass framework."

The Minister stressed: "

Addressing the 'heart of the matter' - remaining open to global talent, while managing social repercussions

Getting to what he called the 'heart of the matter', Dr Tan noted three concerns Singaporeans have when it comes to their views on global talent:

• First, that the growth in EP holders has come at the expense of local PMEs.
• Second, that some workplaces have become more concentrated with a single nationality.
• Third, that there may be discrimination against local job seekers and employees.

 Addressing these, Dr Tan shared:

#1 Increased competition from foreign PMEs

The first key concern Dr Tan tackled is the increased competition for jobs from foreign PMES. As of 2020, Singapore has around 177,000 EPs in its overall workforce - with manufacturing and construction accounting for about one-tenth, he noted.

The rest are in the services sector - with infocomm and professional services accounting for around one-fifth each, and finance accounting for another one-seventh.

"Looking at the change from 2005 to 2020, the total number of EPs has increased by around 112,000. Over this period, the number of local PMEs increased significantly by more than 380,000."

Dr Tan then moved on to talk about growth in local PME jobs, and whether most of it was accounted for by Singapore citizens. "If you look at our unemployment statistics, we provide the figure for Singapore citizens. The citizen unemployment rate over the past decade has been consistently low at around 3%, hence the answer must be yes.

"For those who have asked how much of this local PME job growth has gone to 'born and bred' Singaporeans, notwithstanding the divisive intent of such questions, let me state simply that the majority of this growth over this past decade went to Singaporeans born in Singapore. As we have shared in response to a written PQ yesterday, 87% of Singapore citizens were born here."

The Minister also touched on the following:

• Much attention been placed on the finance and infocomm sectors, which alone accounted for 40% of the increase in EP holders, what the Minister said is "significant". But what is "even more significant" is that these two sectors saw even stronger job creation for local PMEs.
  • The number of EPs in infocomm increased by about 25,000, while the number of jobs created for local PMEs was at around 35,000.
  • Similarly in finance, the number of EPs grew by around 20,000, while the number of jobs created for local PMEs stood at around 85,000.

Dr Tan explained: "We focused on these two sectors because they bring good quality jobs, and Singapore could carve out an advantage and value-add significantly in these areas. As a result, there has been significant job creation. But as we attract foreign banks and infocomm companies to create jobs here, they also need foreign workers, to complement the Singaporean workforce.

"I want to deal with a fundamental misconception, which lies at the heart of some of the things being misconstrued. When a company comes in to invest, and say it needs 3,000 people, it may find about 2,500 of these talents in Singapore, but it will need to supplement this 2,500 and bring in 500 from overseas. If we objected and insisted on the balance 500 to all come from Singapore regardless, we cannot expect the investment to come in, and these 2,500 jobs for locals would be greatly compromised."

The "simple point", he stressed, is that while Singapore has a "good Singaporean talent pool", the pool is not large enough to fulfil all of the needs – the breadth and the depth – of these enterprises. "And often, foreigners bring in skills which complement the Singaporeans’ skills."

 A two-pronged approach to striking a balance

Moving on, Dr Tan talked about helping displaced PMEs, and why the solution is not to do away with hiring foreigners. "There will always be some displacement of PMEs, whether older or younger, in any economy. Why? Because the business world is never static – industries change, companies relocate, companies downsize etc. Not having foreigners does not change this.

"What matters most is whether we are able to find jobs for these displaced PMEs. To do this, we need new companies to start up in Singapore, new investments, expanding MNCs. And so far, we have done credibly in this regard – new jobs created have far exceeded the jobs lost, our unemployment rate has been kept low, and the re-entry rates for displaced PMEs are high."

He then elaborated on Singapore's two-pronged approach to striking a balance between ensuring that businesses have access to skills and manpower to grow and succeed, and creating opportunities for local workers to grow and progress.

First, is to ensure local workers can compete fairly, and this is done through work pass controls.

"Our view is that foreign manpower should not come to Singapore just because they are cheaper to hire than locals. They should complement and not displace the local workforce. They should bring in extra skills to help the companies, and create more Singaporean jobs. In line with these objectives, at the Work Permit and S Pass level, we have quotas and levies in place to regulate foreign worker numbers.

"We have been progressively tightening quotas and raising levies to reduce manpower reliance, spur job re-design and push for quality growth. Over the past decade, we have steadfastly held our course, despite numerous calls from businesses to relax our rules. We commit to productivity-led growth because we believe many of these jobs have the potential to be transformed into good jobs that provide higher real wages and rewarding careers for Singaporeans."

For EPs, Dr Tan noted that there is no quota or levy imposed due to fierce competition for global talent and worldwide shortages in areas such as technology and digital skills.  

Dr Tan further highlighted that there will always be calls from workers to tighten our foreign workforce policies further, just as there will always be calls from businesses to relax them.

“There are limits to how far we can tighten our controls, without eventually hurting Singaporeans. With remote working becoming more prevalent, companies increasingly do not need to site their manpower in Singapore. In fact, we may find more businesses simply choosing to move entire business functions offshore, if it becomes too difficult, onerous or expensive to operate here. Singaporeans will end up losing their jobs too.”

Second, is to ensure Singaporeans can compete strongly.

“Singaporeans who are displaced from their jobs, and need to find replacement jobs. This happens not only because of competition from foreign workers, but because of other factors like technological change and industries phasing out. This is why the government invests so heavily in retraining and skills development, so that displaced workers can gain new skills and reinvent themselves, either by doing a different job in the same industry, or transiting to another industry altogether.”

Efforts in doing so include Singapore’s system of education and training, that goes beyond formal schooling (e.g. SkillsFuture), as well as further support mesures such as the SGUnited Jobs and Skills Package.

#2 The concentration of nationalities among foreign PMEs

The second key matter of concern Dr Tan tackled relates to questions raised on – the nationality profile of work pass holders and their dependants, from China, India, the US and Australia.

On this, Dr Tan pointed out that for foreign policy reasons, the Government does not publish detailed statistics on its foreign workforce, especially by nationality. “We are not aware of any country that reports at the level of granularity requested. Nevertheless, we recognise that if misconceptions continue to spread, in spite of all our attempts to address them in other ways, even more damage will be done.”

Thus, he shared the following numbers to “address misconceptions and allow for a meaningful engagement on the issue at hand”:

The top nationalities that comprise around two-thirds of Singapore’s EP holders has been consistent since 2005 – namely, China, India, Japan, Malaysia, Philippines, and the UK. “The interest is really in Indian EP holders,” the Minister noted. The proportion of EP holders from India has increased from about one-seventh in 2005 to a quarter in 2020. In comparison, the proportion of EP holders from China has remained relatively stable across this time period.

“Is this the result of more favourable treatment for Indian EP holders due to the CECA? The answer is No. As I shared earlier, all work pass holders in Singapore have to meet the same criteria before they are allowed to enter our labour market. There is no differentiation based on nationality.

“Rather, these numbers reflect trends in the global demand and supply of tech talent”, he added, noting that the larger increase in Indian EP holders compared to other nationalities is driven by the rapid growth of the digital economy, resulting in a significant growth of technology talent.

#3 Discriminatory hiring practices

The last key concern addressed surrounds discriminatory hiring practices.

“We know that not all employers play by the rules. We have zero tolerance towards discriminatory hiring practices. All employers are expected to comply with the requirements of the FCF, and not discriminate on characteristics that are not related to the job.”

Dr Tan reminded that when hiring foreign PMEs, employers must first advertise on MyCareersFuture.sg, and consider all local candidates fairly before submitting a work pass application.

He added:

• Since its introduction in 2014, MOM has been “progressively enhancing” the Fair Consideration Framework (FCF). In January 2020, it introduced stiffer penalties for discrimination cases, so errant employers can have their work pass privileges suspended for at least 12 months, and up to 24 months.
• Last year, the MOM extended the FCF job advertisement requirement to cover S Passes as well as EPs, and doubled the minimum advertisement period from 14 days to 28 days to give local jobseekers more time to respond to job openings.
• Over the past three years, TAFEP has handled an average of 170 nationality discrimination cases arising from complaints annually. The top three sectors making up about half of the complaints are wholesale and retail trade, administrative and support services, and other service activities. These cases are investigated by TAFEP and where warranted, referred to MOM for enforcement.

"Going forward, we will do more to clamp down on egregious employers with discriminatory employment practices. Several MPs like Mr Louis Ng, Mr Patrick Tay and Mr Vikram Nair had earlier suggested strengthening our levers to give more bite to our Tripartite Guidelines on Fair Employment Practices. We take these suggestions seriously and have been studying various options."

Read Dr Tan's full speech here.

Snapshot: Minister Ong Ye Kung's ministerial statement on the topic

In his statement, Minister Ong addressed the same key concerns as Dr Tan, stressing that there is a need to be careful of the rise of xenophobia and "nativist politics."

Excerpts below.

On the FTAs and CECA

"Indeed, Singaporean PMEs, like PMEs in other advanced economies, are facing challenges. Many have given us their feedback, and the Government has been taking steps to address their concerns.

"But our FTAs in general, and CECA in particular, are not the cause of the challenges our PMEs face; if anything, they are part of the solution."

On concerns beyond FTAs - global versus local

"Mr Speaker Sir, as I explained earlier, our FTA strategy has benefited Singaporeans and Singapore. So it is disappointing that FTAs are now a target of political attack. But perhaps I should not be surprised, as this has happened in many countries.

"Such debate goes beyond FTAs. The question of global versus local has emerged as the new dominant political divide in democracies around the world."

He then went on to cite situations such as Brexit, France's next Presidential election, and lobbies against free trade in the US.

"These consequences go beyond the economic sphere, and often strike at the heart of a nation and a community’s sense of identity and security. That is the most unsettling change, causing people to become unsure if they are on the whole better off with globalisation.

"Such concerns are genuine, and deserve serious and proper attention. We are a small country, and an unrestricted flow of workers from a large country can change the lived experience of Singaporeans, alter the character of our society, and even overwhelm us. But we need to be careful that these valid concerns are not exploited by political groups, and intentionally or not, end up sowing division, stoking fear, and fanning hatred."

Read Minister Ong's full speech here.

Photo / Screenshot of the livestream on MCI Singapore's YouTube channel, 6 July 2021 [Pictured: Dr Tan See Leng, Minister for Manpower, Singapore]